Sunday, February 10, 2013

Default is the greatest threat by Rod Estvan

I
doubt that the proposal for a Constitutional amendment will go anywhere fast.
HJRCA0011 currently is stuck in the House rules committee, and I don’t expect
it to get out of that committee. As some of you know, I am a registered
lobbyist that works on education issues for students with disabilities, but the
issue of pensions is so pervasive in Springfield that it comes up in relation
to every appropriation, even HB 190 supplemental appropriation that just passed
and was signed into law last week.The
Sosnowski amendment as of today does not have any co-sponsors and, since Joe
Sosnowski is a Republican, his caucus lacks the constitutional three-fifths
vote for this proposal to pass even the House. I also (at this time) do not
believe Speaker Madigan would even consider supporting this proposal because
even he could not get enough votes for this proposal to pass.The
greatest threat to Article XIII, Section 5 is likely to be a revisionist
interpretation of the section by Illinois Courts in the situation of a default.
Each of the separate pension funds has a different projected collapse date; one
of the first to go will be the pension fund for members of the Illinois General
Assembly itself. If it comes to the point of default, that body could determine
not to fully honor its own pensions, and any former member who is a recipient
could litigate to defend his or her payments. At that point, the Courts would
have to determine whether or not to issue a direct order to the General
Assembly and Governor to fully honor the pensions. Currently,
all bills seriously being considered in the General Assembly try to play with
the language of the Constitution to reduce the overall pension debt. Most
unions in the We are One coalition believe these proposals as currently drafted
are unconstitutional and have stated they will litigate if the bills pass. I
suspect in the abstract the Courts will agree with the unions and strike down
the bills if it comes to that, and I think Speaker Madigan believes so too.
This is why he is pressuring the unions to support a grand pension reform plan…--Rod EstvanCommentary

“…If the Illinois Supreme Court
were confronted with a circumstance where a pension fund was on the verge of
default and pension payments were diminished, then the court would most likely
permit a mandamus action to proceed and resolve that action in the same
manner as Jorgenson v.Blagojevich [2004]. In that case, the
court held that where a constitutional or statutory provision ‘categorically
commands the performance of an act, so much money as is necessary to obey the
command may be disbursed without any explicit appropriation.’ The court applied
this principal to compel the State Comptroller to pay judges from the State
Treasury, without an appropriation, the cost of living increase that was part
of their constitutionally-protected salaries under Article VI, Section 14 of the
Illinois Constitution.

“As noted, that provision bars the diminishment of judicial salaries just as
the Clause prohibits the diminishment of pension benefit rights. Accordingly,
the Supreme Court would most likely grant pension participants the same relief
provided in Jorgenson by compelling the Comptroller to pay the needed
funds from the State General Revenue Fund, especially since the State Pension
Funds Continuing Appropriation Act requires automatic appropriations be made
from the Fund to the five State pension systems…” (IS
WELCHING ON PUBLIC PENSION PROMISES AN OPTION FOR ILLINOIS?AN ANALYSIS OF ARTICLE XIII, SECTION 5 OF THE
ILLINOIS CONSTITUTION by Eric M. Madiar, Chief Legal Counsel to Illinois Senate President John J.
Cullerton and Parliamentarian of the Illinois Senate).

1 comment:

All just ways of saying we need to cut benefits for an eventuality that may never happen. It's austerity politics. And I never hear in the boom years that maybe we need to devote extra money to the pension funds. Never. When there are boom years, I never hear, let's give the teachers bonuses. Never.

The problem with "the sky is falling" folks is they want to drive down wages for an eventuality that may never happen. It is Disaster Capitalism.

So the pensions are underfunded, just like they have been for decades. What is different is that today the legislature is saying they don't have to pay their obligations because they don't want to. We need to push back against that. They do have to pay. And it is not greedy to expect to be paid for my service to the state in the past. I expect to be paid what I am owed.

I like this article on the difference between Social Security and a Pension fund:http://uicretirement.blogspot.com/2013/01/social-security-anti-poverty-versus.html

Teacher/Poet/Musician

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A writer must “know and have an ever-present consciousness that this world is a world of fools and rogues… tormented with envy, consumed with vanity; selfish, false, cruel, cursed with illusions… He should free himself of all doctrines, theories, etiquettes, politics…” —Ambrose Bierce (1842-1914?). “The nobility of the writer's occupation lies in resisting oppression, thus in accepting isolation” —Albert Camus (1913-1960). “What are you gonna do” —Bertha Brown (1895-1987).